IMF urges Beijing to cut excess steel, coal capacity

Dhaka,  Tue,  26 September 2017
Published : 16 Aug 2017, 21:38:24

IMF urges Beijing to cut excess steel, coal capacity

WASHINGTON, Aug 16 (Reuters): The International Monetary Fund (IMF) on Tuesday urged China to set more ambitious targets for its coal and steel industries to cut excess production capacity and bring more efficient plant on line as Beijing bids to steps up economic reforms.

China, the world's top steel and coal producer, has vowed to launch a campaign to cut excess capacity in various industrial sectors, including coal-fuelled power and the construction materials industry, in an effort to cut inefficiencies and tackle pollution.

A total of 140 million tonnes of steel production capacity and 800 million tonnes of coal capacity - numbers roughly equal to about a tenth of the world's total output in 2016 - are due to be eliminated over the coming three to five years under existing Beijing plans.

"The reduction targets are appropriately front-loaded but could be more ambitious," the IMF said in a statement on Tuesday. The fund's comments came as part of a broader study of the world's second-biggest economy.

"Under the current cut targets, crude steel capacity would still be close to 2013 levels and account for nearly half of global capacity by 2018-20 due to previously planned investment," the IMF said.
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